Co-living operators witnessing high growth as workforces return to offices
Yello Living, a new player in Bengaluru, is capitalizing on this opportunity with its focus on resident experience, strategic location, and competitive pricing
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Co-living as a space is growing very fast within the real estate segment. What is the reason behind setting up ‘Yello Living’ and entering into the co-living space?
I came back from the US in 2015 and was running the family business, which was related to investment advisory. We have done multiple types of asset classes like plotted, apartment, commercial, and others. I came across this property in 2018, which is placed at the heart of ITPL, Bengaluru. At that time, the landowners were considering various options. We advised the landowners to opt for co-living and reached out to experts for developing the same. We have been involved in this project since 2019. We helped the conceptualisation and building of the project. Subsequently, we decided to be the operator of the project and requested the landowners to act as operator. That’s how, it became our first project.
Co-living as a segment of real estate is evolving. As we have the passion to do something in the real estate space, and co-living is rapidly growing, that are the reasons for entering the co-living space. Also, the current project is Bengaluru is located in a very strategic location. This is another reason for which we entered the co-living space.
There are many co-living players in the market given the growth potential of this segment. Can you throw some light on the key differentiators of Yello as compared to its peers?
When you start looking at co-living as a space, there are different kinds of players. There are student housing, PGs (paying guests), and operators. There are two things which we are driven by. One is our residence where people are going to come in and live. Our focus is to provide the best experience to our residents. It’s not only to build a good building, but also to provide a pleasant experience. For instance, we try to simplify the check-in experience of clients. Similarly, if for customers, deposit (for the co-living space) is a challenge, we have tied up with institutions for providing them with a zero-deposit option. We have understood that food quality is an issue in PGs. That is the reason that we have hired best food operators from which the resident can choose based on his or her budget. We have hired an inhouse operator for laundry. Our housekeeping and security arrangements are top notch. We are bringing in a lot of technology like keyless entries, AI-enabled cameras and other related matters. There are many people who may be coming for the first time to live away from their homes. So, we try to make them comfortable and have a good experience. So, everything we do, is driven by these factors.
Similarly, as I have come up real estate advisory space, we look at property owners, who are our partners. How can we maximise revenue for them, how can we provide the best return on their investment. So, we focus on these two sets of factors, which differentiate us from other players.
What is the capacity of Yello Living’s co-living space at ITPL, White Field in Bengaluru? What is the occupancy ratio now?
Once this project is fully completed, the ITPL project will have around 600 rooms. As of now, we have 330 rooms in which close to 650 beds are operational. We are adding around 300 rooms in the near future. This will be completed in the next few months. We have launched this project two months back and are receiving good response from customers. Around 200 beds have been occupied now in this short span of time. We are looking at next two-three months to reach optimal occupancy.
Can you throw some light on the pricing aspect? Are you competitive in pricing with regard to its peers or charge a premium?
We are quite competitive as far as pricing is concerned. We charge around Rs 13,000 for double bed rooms plus the GST and we charge around Rs 24,000 for private rooms. I think, our rates are pretty competitive in the market place. One important thing is that our pricing is very transparent. We don’t put conditions on various amenities provided, which is usually the case by many other players in the market place.
Can you throw some light on the kind of investment that has gone into this project?
In a co-living project, the landowner invests to set up the facility. In this project, we have entered into an arrangement in which we get certain percentage based on the results we show. So, we are investing more on our brand, people and other related aspects. We are bootstrapped. So, we are doing it ourselves. As an operator, we want follow this model in the future. As we are a real estate advisor also, we may buy assets and then give it to Yello as an operator.
What is the blue print for expansion in coming years? Can you throw some light on this aspect?
Currently, we are focussed on this project. It’s a big project as we are building more than 1,000 beds and 600 rooms. We want to focus on the current project for next couple of quarters for reaching maximum occupancy. We are also streamlining our processes. Having said that we are also in talks with property owners for getting into other projects. We are exploring various opportunities. By the end of this year or early next year, we will look at couple of more properties in Bengaluru. We may also look at other cities in coming quarters.
Demand is very high in the co-living space. We have seen demand for short stays also. Therefore, we have reserved some beds for short stays. Similarly, there are some companies which want to provide two weeks of stay to their new employees, when they move to other cities. So, we see that kind of conversation going on. That’s why we have categorised our property into various segments. As far as other segments like student housing is concerned, we will also look into that kind of model if we get good opportunity.
